Hui Ka Yan, also known as Xu Jiayin, the founder and chairman of the Chinese property conglomerate Evergrande, once held the title of Asia’s wealthiest individual. Rising from a modest background, this 64-year-old entrepreneur transformed into the head of an expansive business empire. In 2017, Forbes magazine estimated his fortune at a staggering $42.5 billion, making him the richest person in Asia.
However, Hui Ka Yan’s current situation is starkly different. He is under investigation for suspected “illegal crimes” as Evergrande grapples with an immense debt burden totaling $300 billion. This financial turmoil has taken a toll on his wealth and reputation.
Early Life and Background
Hui Ka Yan’s early life was marked by adversity. Born in 1958 into a poor rural family, he experienced the tumultuous era of the Great Leap Forward, during which Mao Zedong’s rapid industrialization campaign caused widespread famine. After losing his mother to sepsis at just eight months old, Hui was raised by his grandmother in a village in Henan province, central China.
Following his university graduation in 1982, Hui worked as a steel technician for a decade before transitioning to become a salesperson for a property developer in Guangzhou, a city in southern China. It was during this time that he founded Evergrande in 1996.
Entrepreneurial Success and Growth
Evergrande embarked on a rapid expansion journey, leveraging substantial borrowings to fuel its growth. Hui Ka Yan’s leadership and vision played a pivotal role in the company’s ascent. His commitment to hard work and intelligence exemplified the notion that anyone could achieve wealth through dedication and perseverance, according to Alicia Garcia Herrero, Chief Economist for Asia-Pacific at Natixis.
Moreover, Hui’s affiliation with the Communist Party for over three decades elevated his standing. In 2008, he was elected as a member of the Chinese People’s Political Consultative Conference, a prestigious advisory body comprising government officials and business leaders.
Evergrande’s Explosive Growth
Evergrande achieved a significant milestone in 2009 by raising $9 billion in its Hong Kong stock market listing. Hui Ka Yan adopted a “maximum leverage” strategy that propelled the company’s growth even further. His connections with influential real estate tycoons in Hong Kong and Evergrande’s listing on the Hong Kong Stock Exchange facilitated substantial investments in the company.
Evergrande’s business model involved borrowing substantial funds and aggressively preselling apartments that were yet to be constructed. The company’s real estate arm currently oversees over 1,300 projects in more than 280 cities across China. Hui’s empire extended beyond real estate, encompassing diverse operations such as wealth management, electric vehicle manufacturing, and food and beverage production. Evergrande also held a majority stake in Guangzhou FC, formerly China’s leading football team.
In 2020, Beijing implemented new regulations aimed at curbing the debt levels of major real estate developers. These measures forced Evergrande to offer substantial discounts on its properties in an attempt to stay afloat. However, the company is now grappling with a daunting debt crisis that has led to a 99% decline in its stock market valuation. Hui Ka Yan’s personal wealth plummeted to $3.2 billion.
Evergrande suspended trading of its shares in Hong Kong, and Hui became another Chinese billionaire facing investigations by authorities. Some experts draw connections between the scrutiny faced by China’s affluent elite and President Xi Jinping’s Common Prosperity policy, which seeks to address income inequality. Hui Ka Yan, renowned for his opulent lifestyle and private jet travels, symbolizes extreme wealth in this context, according to Dexter Roberts, Director of China Affairs at the Mansfield Center at the University of Montana.